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Week 5 - Liability and Obligations of the Principal

September 2, 2026
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Liability and Obligations of the PrincipalArts. 1910-1918

Week 5 Coverage Table

The table below mirrors the syllabus list for September 2, 2026.
#Assigned CaseTopic/SubtopicDigest
1Spouses Salvador v. Spouses Rabaja, G.R. No. 199990, February 4, 2015a. Principal's liability for acts of agent within the scope of authority (Art. 1910)
2Pleasantville Development Corp. v. CA, G.R. No. 79688, February 1, 1996a. Principal's liability for acts of agent within the scope of authority (Art. 1910)
3Manila Remnant Co., Inc. v. CA, G.R. No. 82978, November 22, 1990b. Principal's liability for acts of agent in excess of authority (Arts. 1910 & 1911) — Solidary liability of principal and agent (Arts. 1911)
4De Castro v. CA, G.R. No. 115838, July 18, 2002c. Liability of two or more principals to commonly appointed agent (Art. 1915)

Study Notes

Article 1910 in two halves. The principal must comply with all the obligations the agent contracted within the scope of his authority; as to acts beyond that scope, the principal is bound only if he ratifies them expressly or tacitly. Salvador v. Rabaja applies the first half in its most practical form: a buyer who pays a seller's attorney-in-fact, armed with an SPA the buyer was entitled to rely on, has paid the seller — and the seller's internal quarrel with the agent is the seller's problem.
Third persons deal with the agency they are shown. Manila Remnant is the strongest statement of the rule: where the principal clothes its agent with the indicia of authority — shared offices, shared officers, its own name on the receipts — it is solidarily liable for the agent's fraudulent double sales, even though it neither knew of nor profited from them. Pleasantville extends the same logic to negligence, holding the developer answerable for its agent's blunder in pointing a buyer to the wrong lot.
Compensation. De Castro confirms that a broker earns his commission once he is the procuring cause of the sale, and that co-owners who jointly engage one broker for the undivided property answer solidarily — the indivisibility of the undertaking, not a stipulation, produces that result.
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